Opinion
No. 94 C 5379.
May 6, 1996
MEMORANDUM OPINION AND ORDER
Plaintiff Alan R. Field ("Field") filed this action pursuant to the False Claims Act, 31 U.S.C. § 3730(h), alleging that Defendant FB Manufacturing Co. ("FB") unlawfully discharged Field in retaliation for his reporting of a potential fraud perpetrated by FB on the United States department of Navy. FB now moves for summary judgment, asserting that, because Field did not have a reasonable basis for his claim of fraud, he is not entitled to protection as a "whistleblower" under section 3730(h). For the reasons set forth below, FB's motion is denied.
BACKGROUND
FB is an Illinois corporation with its principal place of business in Des Plaines, Illinois. FB is in the business of manufacturing industrial components for sale to contractors generally and to General Electric, Inc. ("GE") specifically.
Field was employed as a welder at FB's Gurnee, Illinois facility from June 23, 1986 to March 18, 1993. In February 1993, Field was assigned the responsibility of assisting in, and supervising, the welding of part number 17A148-551 ("the 551 part").
The 551 part was manufactured by FB pursuant to a subcontract agreement with GE. The 551 part is a teardrop partition part for use in the afterburner assembly of the United States Naval Jet F404 engine. GE had a written agreement with the United States Department of the Navy to manufacture the afterburner assembly.
A central step in the manufacture of the 551 parts was the performance of a Tungsten Inert Gas ("TIG") weld on each part; FB personnel performed a series of operations with resect to the 551 parts prior to their welding. These operations included the cleaning of the 551 parts prior to their delivery to the Welding Department by grinding the parts and then vapor degreasing them with trichloroethylene. After this grinding and degreasing procedure was performed, the 551 parts were wrapped in paper and sent to storage before being delivered to the Welding Department.
Of central importance in the parties' present dispute are FB's and Field's differing understandings as to the need for further cleaning of the parts immediately preceding welding. FB asserts that the testimony of John Price ("Price"), a GE Senior Product Quality Engineer, is authoritative on this issue. According to Price, because of the grinding and degreasing procedure already performed on the part, any cleaning needed prior to welding would have been only "minor in nature." Price further explains that it is standard shop practice for a welder to "eyeball" a part and determine whether it needs further cleaning before welding. In fact, Price states that, were he involved in welding 551 parts, upon finding the first set of parts in a batch to be clean, he would weld all the parts in that batch without cleaning them additionally. Price also states that wire brushing and wiping every 551 part with acetone prior to the TIG weld would be far more cleaning than is required by GE specifications.
The sufficiency of the lenient cleaning standards described by Price is further supported by the testimony of Sam Odishoo ("Odishoo"), Field's supervisor at FB until late 1992. During his employment with FB, Odishoo was very familiar with FB and GE specifications for the 551 part. Odishoo avers that neither company's specifications required that every 551 part be wire brushed and wiped with acetone prior to the TIG weld. When he welded the 551 part, Odishoo never used the wire brush and, in most cases, never performed an acetone wipe because the parts were clean when delivered to the Welding Department. Though Odishoo admits to knowing that Field performed these more elaborate procedures on each 551 part, he never told Field to modify his cleaning techniques.
Harry Bowkley ("Bowkley") was a welder at FB at the same time as Field. Bowkley never used a wire brush to clean the 551 parts because, as a rule, they were clean when they arrived. However, Bowkley explains that nobody at FB ever told him not to clean the 551 parts prior to performing the TIG weld.
Notwithstanding Price's, Odishoo's and Bowkley's opinions that additional cleaning was unnecessary, Field used a wire brush and sometimes a file before wiping each 551 part with acetone prior to performing the TIG weld. Don Diehl ("Diehl"), Field's supervisor in 1993, admits that he similarly subscribed to this cleaning approach. Though Diehl understood that the specifications did not require additional cleaning of the 551 part prior to TIG welding if the part was clean, he personally used a wire brush and acetone wipe on every 551 part that he welded. As Field admits, however, Diehl consistently took the position that, since the 551 parts were cleaned prior to delivery to the Welding Department, Field should examine the parts and determine if any further cleaning was necessary before welding.
Field contends that in March 1993 he became aware that the 551 part was being manufactured in violation of FB's internal specifications and in violation of GE's production requirements. According to Field, on March 6, 1993, Diehl and Fred Gruber ("Gruber"), another FB supervisor, allegedly instructed Field not to clean the 551 part during, or immediately after, the welding process; Field purportedly protested this instruction on the basis that it violated safety procedures. Diehl and Gruber also allegedly instructed Field that the 551 part was to be cleaned according to FB and GE standards only when members of GE came to FB to supervise the manufacture of the part.
In further support of his claim that he believed the lax cleaning procedures in place at FB to be violative of GE specifications, Field points out that "shop travellers" (i.e. documents containing instructions that accompany parts throughout the manufacturing process) accompanying the 551 part required that each part be brushed with a wire brush and wiped with acetone before welding. Field believed that these instructions came from GE. Diehl admits that the shop travellers accompanying the 551 part through the manufacturing process were prepared by FB and contained detailed instructions for cleaning this part.
Field apparently thought that FB's "flexible" cleaning protocol violated FB's own Procedure 630 — particularly section 4.14 of that Procedure — which contains the steps to be followed for the 551 part prior to welding. Procedure 630 does not require that the 551 part be cleaned in any particular manner prior to the TIG weld, however. Rather, Procedure 630 states that cleaning should be in accordance with "customer specification."
In his Amended Complaint, Field asserts his belief that a failure to follow the cleaning procedures could result in the weld becoming hard and brittle, thereby losing some of its intended strength and durability and creating a potential safety hazard for the F404 Jet. However, Field admits to his lack of knowledge as to whether the jet engine would fail if the weld on the 551 part came apart. Charles Provenzano ("Provenzano"), GE's Senior Lead Engineer for the F404 engine's afterburners, is of the opinion that a failure of the 551 part would not cause a safety issue.
Field admits that he has never seen the GE specification containing the cleaning requirements for the 551 part. Price states that GE Specification No. P8TF3 ("the GE specification") contains the required specifications for manufacture of the 551 part, including the necessary cleaning procedures prior to performing TIG welds on this part. The GE specification does not require that each 551 part be cleaned by wire brushing and wiping with acetone prior to performance of the TIG weld. This specification merely requires that the part be "clean" prior to welding.
To counter any inference of fraud, FB asserts that there is no safety issue with regard to the 551 part weld, that no defective parts were shipped to GE, and that GE's investigation into the matter revealed no wrongdoing.
After Diehl purportedly instructed Field to truncate his cleaning procedures, Field allegedly observed the 551 weld being performed in violation of the cleaning standards. Specifically, Field supposedly observed improper welds performed by Diehl and Zachary Marino on March 15, March 17 and March 18, 1993. Field admits, however, that these welders may have foregone the additional cleaning procedures only after finding the parts clean upon inspection.
In response to these apparent violations, Field had a conversation with Philip Catrintza ("Catrintza"), FB's Quality Manager, on March 15, 1993. Field allegedly told Catrintza that Diehl had instructed him to refrain from wire brushing and acetone wiping each part. According to Field, Catrintza told him to continue to use the wire brush and acetone on each part, in accordance with established procedure. Field similarly complained to FB's quality assurance engineers about the alleged failure of FB employees to follow the cleaning procedures.
On March 17, 1993, Field met with Gruber, Diehl, Rudy Ceisel (Ceisel"), and Jim Bouchard ("Bouchard"). Gruber, the plant manager, allegedly accused Field of spreading rumors concerning FB's failure to follow procedures. Diehl and Gruber recall that Field repeatedly insisted that a failure to wire brush and acetone wipe was a violation of GE specifications. According to Field, Gruber stated that he wanted Field out of the company because of these rumors.
Field was discharged by FB on March 18, 1993. Field alleges that Gruber informed him of his termination and that Gruber explained that Field was being fired because of his complaints regarding the cleaning procedures. Field maintains that neither insubordination nor failure to follow instructions were ever mentioned by Gruber as causes for Field's dismissal.
On Field's termination form, dated March 19, 1993, Gruber wrote that Field was terminated for "causing problems by spreading false accusations that we weren't following accepted practices in welding. . . ." FB now asserts that Field's termination was prompted not only by Field's allegedly false statements regarding the 551 parts, but also by insubordination and a consistent deficiency in Field's productivity level.
In support of this contention, FB offers evidence of Field's low productivity — evidence which Field does not dispute. For example, Odishoo claims that Field performed unnecessary and elaborate cleaning procedures, and that Field's production rate was approximately half that of Odishoo. Odishoo was of the opinion that Field could be "a hard person to deal with," though he personally had few problems with him. Field's productivity was also criticized by Gruber as being "extremely low, inefficient." Diehl also asserts that Field used an inefficient method and had a low productivity rate.
FB also points to evidence of Field's insubordination. In 1992, Field received a disciplinary warning from Gruber because he "trashed" the work station of another employee. Gruber issued a secondary disciplinary warning to Field for Field's failure to follow the instructions of Welding Supervisor Diehl. FB also points to other evidence indicating Field's hostility towards Diehl. Finally, Field apparently spent excessive time away from his work station and occasionally was found constructing model airplanes at his station.
In addition to disputing Field's claim that he was terminated exclusively as a result of his complaints concerning FB's cleaning procedures, FB offers evidence to prove that, in fact, no fraud was perpetrated on GE by FB and that, as a result, Field had no reasonable basis to believe that an action under the False Claims Act may have existed. Initially, according to FB, every 551 part manufactured by FB was subjected to a fluorescent penetrant inspection prior to shipment to GE. Catrintza, the FB employee designated by GE as its Supplier Quality Representative, testified that it is unlikely that any defective weld would be missed by this inspection. In reviewing the daily logs of these inspection tests for the 551 part from January to June 1993, Catrintza notes that 551 parts very seldom were rejected because of defective welds. These records also indicate that no defective parts were shipped to GE during this time period.
GE — through a three-man team comprised of GE employees John Sawulski, Price, and John Ceslofska — also conducted an investigation into the alleged defective welding of 551 parts in July 1993. The GE team reviewed numerous documents and received full cooperation from FB employees. The investigation revealed that, from October 19, 1992 through June 26, 1993, only four parts did not pass the fluorescent penetrant test. Furthermore, the team found no evidence that any defective parts were ever shipped to GE, nor any evidence that FB had failed to follow GE welding specifications for the 551 part. In a letter dated July 16, 1993 to John Boush of the Defense Procurement Office of the Federal Government, Sawulski stated that the investigation at FB found no evidence to support Field's allegations. In a "Management Summary" of the investigation findings, the team concluded that there were no "intentional procedure violations or shipments of non-conforming hardware."
DISCUSSION
Summary judgment is appropriate when "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c); Serfecz v. Jewel Food Stores, 67 F.3d 591, 596 (7th Cir. 1995). A material fact is one that may affect the decision, while a genuine issue exists if there is sufficient evidence such that a reasonable jury could decide in favor of the nonmovant.Anderson v. Liberty Lobby, 477 U.S. 242, 248 (1986). When considering a motion for summary judgment, the Court must view the facts, and all the inferences drawn from those facts, in the light most favorable to the nonmovant. Griffin v. Thomas, 929 F.2d 1210, 1212 (7th Cir. 1991); Roman v. U.S. Postal Service, 821 F.2d 382, 385 (7th Cir. 1987).
In his Amended Complaint, Field claims that he was terminated by FB in violation of 31 U.S.C. § 3730(h). This section specifically provides:
[a]ny employee who is discharged . . . by his or her employer because of lawful acts done by the employee on behalf of the employee or others in furtherance of an action under this section, including investigation for, initiation of, testimony for, or assistance in an action filed or to be filed under this section, shall be entitled to all relief necessary to make the employee whole.31 U.S.C. § 3730(h). According to Field, his dismissal from FB for registering concerns with respect to the sufficiency of FB's pre-welding cleaning procedures for the 551 part is precisely the type of retaliatory conduct expressly prohibited by this section.
To maintain his section 3730(h) action, Field must show (1) that he engaged in conduct protected under the statute, (2) that FB was aware of such conduct, and (3) that he was terminated in retaliation for his conduct. Mikes v. Strauss, 889 F.Supp. 746, 752 (S.D.N.Y. 1995).
Based upon the materials submitted to the Court, there appears little doubt that Field can establish, or, at least, that a genuine issue exists as to, the second and third elements of his retaliatory discharge claim. With respect to the second element, FB clearly admits that it was aware of the internal complaints that Field made regarding the cleaning procedures. Further, with respect to the third element, FB admits that Field's claim of fraud was one of the principal reasons for his firing; in fact, Field's termination report cites the fraud claim as the sole basis for Field's dismissal. Moreover, the fact that Field was terminated only three days after he made his claims as to the insufficiency of the cleaning procedures indicates a strong causal connection between Field's "whistleblowing" conduct and FB's decision to fire Field.
FB maintains, however, that no genuine issue of material fact exists with respect to the first element of Field's section 3730(h) claim and that, because Field was not engaged in statutorily protected activity, his False Claims Act claim must fail. As is evident from the language of the statute, section 3730(h) only protects activities which relate to "an action filed or to be filed under this section." 31 U.S.C. § 3730(h). The Seventh Circuit has established that the filing of qui tam litigation under the False Claims Act is not a necessary prerequisite to protection under section 3730(h). Neal v. Honeywell, 33 F.3d 860, 864 (7th Cir. 1994). The Neal court explained:
A better understanding is that "to be filed" limits coverage to situations in which litigation could be filed legitimately — that is, consistently with Fed.R.Civ.P. 11. Then an employee who fabricates a tale of fraud to extract concessions from the employer, or who just imagines fraud but lacks proof, legitimately may be sacked. No action is "to be filed" in either case, and employees who use reports of fraud to better their own position, or who behave like Chicken Little, impose costs on employers without advancing any of the goals of the False Claims Act.Id. Thus, Neal makes clear that, while the "to be filed" language of section 3730(h) is to be liberally construed, the statute does not protect an employee who (1) fabricates a claim of fraud, or (2) has no reasonable basis for a fraud claim.
This relatively facile standard of "legitimacy" is also supported by the legislative history of the section, which explains that "protected activity should . . . be interpreted broadly." S.Rep. No. 345, 99th Cong., 2d. Sess., 34, reprinted in 1986 U.S.C.C.A.N. at 5299.
FB asserts that Field never had a reasonable basis for an action under the statute and that, consequently, Field cannot claim retaliatory discharge under section 3730(h). Specifically, FB contends that, because the cleaning specifications for the 551 part were never actually violated, Field only imagined a fraud and had no reasonable basis to question FB's cleaning procedures. FB points to the GE investigation that absolved FB of any blame for fraudulent conduct and argues that this evidence mandates summary dismissal of Field's retaliatory discharge claim.
In judging the reasonableness of Field's allegations of fraud, however, only that information known to Field at that time the allegations were made is relevant. Neal explains that section 3730(h) should be read as "linking protection to events as they were understood at the time of the investigation or report." Neal, 33 F.3d at 864. Thus, the fact that later investigations may have revealed the absence of any fraud is of no import in this Court's analysis of the reasonableness of Field's actions.
Judged according to the relatively lenient standard of Fed.R.Civ.P. 11 as Neal instructs, Field has proffered sufficient evidence to support the inference that he possessed a reasonable basis for his conduct. First, the fact that Field allegedly was instructed to follow more elaborate cleaning procedures only when GE personnel were present at FB might, by itself, lead a reasonable employee to believe that something "fishy" was afoot, such that the employee would be justified in inquiring further about the required protocol. Second, Field's belief that additional cleaning was required prior to welding was arguably reasonable in light of (1) the specifications set forth in the "shop travellers" which accompanied the 551 part through the manufacturing process and (2) the fact that Field had always performed these additional cleaning procedures without complaint from his supervisors. Indeed, Field's most recent supervisor, Diehl, admits that he also would clean the 551 parts with the same elaborate technique as Field. Thus, based on the evidence presented, a reasonable jury certainly could conclude that Field had reasonable cause for suspicion and for initiating an inquiry into FB's potentially fraudulent conduct.
While FB hints that Field's fraud claim may have been motivated by animus towards his supervisors, this argument does not warrant dismissal of Field's claim at this stage of the proceedings, as a reasonable jury, faced with the evidence and testimony presented by the parties, could find that Field was acting in good faith when he questioned the failure of FB employees to follow the more elaborate cleaning procedures.
Because there remain genuine issues of material fact with respect to the "reasonableness" of Field's conduct, Field's motivations, and the significance of Field's fraud claim in FB's decision to terminate Field, summary judgment is inappropriate in this case.
CONCLUSION
For the foregoing reasons, FB's motion for summary judgment is denied.
Defendant's motion for summary judgment is denied.